A 'BIG' EXPERIENCE FOR ALL

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t’s a dilemma that every retailer faces when expanding his presence in smaller towns across the country, and that’s largely related to his strategy including merchandising and store size, and at the same time ensuring his profitability. And, this comes at a time when a consumer boom is currently underway in the hinterland, and organised retail is aiming to leverage this emerging opportunity. 

Apart from that, with store rentals in tier-II towns a fraction of Mumbai and New Delhi, it offers considerable scope for retail chains to effectively ‘engage’ with these consumers. Striking a similar view, Punit Agarwal, Promoter and CEO, Promart Retail, with an extensive presence in smaller towns, said, “Consumers in this segment are far more loyal vis-à-vis those in metros, and it offers several opportunities for long-term growth.” 

 

Merchandise that sells

Senior retailers pointed out that a ‘one-size-fits-all’ strategy would not be very effective in the hinterland, and particular attention needs to be paid on understanding local customer ‘tastes’ and trends.  As a result, retail chains vary their product portfolio from one region to another as well as extensively analyse consumer
purchase patterns. 

Asheeta Chhabra, Head-business development, Chhabra 555, said, “Our experience has shown that it is not possible to offer a uniform product portfolio across the country, and franchisees offer a repertoire based on  silhouettes and colours, popular in a particular region.”

Consultants also stressed that the average purchase in this segment typically varies between Rs 2,000 and 2,500,  lower than metro cities, and retailers need to respond appropriately. Echoing a similar view, Anita Dongre, Owner, AND Designs India, said, “We analyse customer purchase patterns in earlier quarters and suitably modify the products offered at our stores in
this segment.”

And, in tune with the global trend, social media also plays a key role in the purchase decision of consumers in tier-II and smaller towns. Deepak Aggarwal, MD, Kazo, a clothes and accessories retailer, said, “We follow emerging trends online as well as at our outlets, and appropriately modify our in-store offerings.” In addition, store staff in the ‘interiors’ are suitably trained to answer customer queries in the local language, and also explain the relevance of a particular product.

 

Store ‘positioning’

The store location strategy in smaller towns differs substantially from metros, and that’s because consumers in the hinterland prefer visiting stores in their neighbourhood. Dongre of AND Designs India, stressed on the importance of identifying the target audience as well as carrying out a feasibility study
before opening an
outlet in tier-II towns.

Dongre, said, “We prefer opening stores close to the residence of our target consumers, and it enables us to quickly establish a close ‘relationship’ with these shoppers.”

In addition, while the in-store layout in smaller towns needs to be relevant to local tastes, but experts also stressed on a contemporary store design. And, that’s because consumers in this segment are also ‘maturing’. As a result, while smaller sized stores may be en vogue in the hinterland, but leading brands like Reebok and Tommy Hilfiger, have maintained broad parity in the ‘experience’ and ‘feel’ between outlets at metros and smaller towns. 

Clearly, retailers need
to develop a suitable strategy to succeed amongst the ‘emerging’ consumer segment.

 

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